STUDY SEEKS WAYS TO DEVELOP UNTAPPED OFFSHORE CALIFORNIA OIL

Oil companies and government agencies have joined forces to explore ways to develop huge reserves under leases off California. Minerals Management Service, California State Lands Commission, local agencies, and oil companies have kicked off a 3 year study to find creative ways to develop those resources. Extended reach drilling from onshore areas into state tidelands and/or from existing platforms in federal water is one idea that may have merit, the study group said.

Feb. 16, 1993

2 min read

Oil companies and government agencies have joined forces to explore ways to develop huge reserves under leases off California.

Minerals Management Service, California State Lands Commission, local agencies, and oil companies have kicked off a 3 year study to find creative ways to develop those resources.

Extended reach drilling from onshore areas into state tidelands and/or from existing platforms in federal water is one idea that may have merit, the study group said.

Industry has at least $5 billion invested in existing state and federal leases off the central and southern California coast, said Terry Covington, representing the Western States Petroleum Association in Santa Barbara, Calif.

Exploring new offshore leases is hampered by oil moratoriums, marine sanctuaries, delayed leasing programs, and environmental regulations, Covington said.

But there is potential to develop existing leases "in recognition that there are tremendous revenues and resources available.

A number of key operators off California have dropped or suspended state and federal leases because of continuing controversies, notably the spat that crippled the Point Arguello project. Other companies have withdrawn or shelved possible development projects in the prolific Santa Barbara and Santa Maria offshore basins.

In 1989, after a tanker permit for the Point Arguello project was killed in the wake of the Exxon Valdez tanker spill off Alaska, Chevron Corp. asked for suspension of its offshore leases until yearend 1994.

The same year, Shell Oil Co. asked for suspension of its leases until mid-1994.